German truckmaker MAN AG said Tuesday it was withdrawing its hostile takeover bid for Swedish rival Scania AB and would instead seek a friendly linkup.
Talks with Volkswagen AG, a major shareholder in both MAN and Scania, indicated that a friendly cooperation between the German and Swedish companies would be preferable to the hostile bid, which VW had rejected.
"As a shareholder of Scania, MAN is therefore looking forward to entering into further discussions during 2007 to seek a friendly combination of MAN AG, Scania AB and Volkswagen Heavy Trucks," MAN said in a statement.
Swedish investment firm Investor AB, the second largest shareholder in Scania after Volkswagen, welcomed MAN's decision.
"Investor will continue to support Scania's successful development as a stand-alone company, but we will naturally evaluate possible industrial partnerships and combinations in order to develop Scania further," it said.
"Amicable discussions with MAN and VW are a priority. The lapse of the bid provides an opportunity to do so without time pressure."
The company, the investment arm of Sweden's powerful Wallenberg family, had rejected MAN's offer as too low.
Shares of MAN rose 1.9% to 75.52 euros ($97.88) in Frankfurt. Scania shares fell 3.3% to 445.50 kronor ($63.31).